“You Can Buy $CTGO at Just Three Times Next Year’s Free Cash Flow” – Contango’s Shawn Khunkhun

MiningStockEducation.com Jul 17, 2026

Summary

Contango ORE trades at roughly three times next year's expected free cash flow, a multiple the company's president calls attractive.

Shares fell about 50% since January, which the guest attributes to a broad precious-metals equity sell-off.

The guest expects a mineral resource estimate for Kitsault Valley within weeks, plus drill results supporting a 2028 Lucky Shot restart.

Contango retired its hedge book with debt at about 7% interest, leaving roughly $90 million in cash against $45 million of debt.

Ore from the Alaska mine is trucked to Kinross's Fort Knox mill under a direct ship ore (DSO) arrangement.

Powers frames Kinross as the processing partner in Contango's direct-ship-ore model, where the ore is scooped and trucked in, Kinross processes it and sends back a cheque, and Khunkhun confirms the ore ships to Fort Knox.

Khunkhun says the roughly 50% share decline since January 2026 is a broad precious-metals equity sell-off rather than anything company specific, and that at about three times next year's expected free cash flow the shares are worth buying as of July 2026.
He says the hedge book was only ever a debt covenant attached to building the mine, and the residual 15,000 ounces owed into hedge contracts in 2027 were retired with debt at about 7% rather than by issuing equity into a depressed share price, leaving about $90 million in the treasury against $45 million of debt.
Guidance he points to for 2027 is a record production year at the operating Alaska mine, with 75,000 to 80,000 ounces and costs guided to about $1,500 an ounce.
Cash flow is being reinvested rather than returned: about $50 million is going into Lucky Shot for a targeted return to production in 2028 at 40,000 to 50,000 ounces, alongside Johnson Tract permitting and infrastructure work and a 40,000 meter drill program in the Kitsault Valley.
He puts the shares at roughly 0.3 times net asset value, less than half the pure-play average of about 0.75, and argues a move toward one times NAV over the next 18 months would be worth more than a tripling of the share price and would open the door to M&A.

Top takeaway Powers says Contango's CEO Rick Van Nieuwenhuyse has flagged the acquisition of a mill as the company's next major step change.
Khunkhun adds that Van Nieuwenhuyse's decades working in Alaska, including businesses he built worth about $2 billion outside Contango, give him a competitive advantage in M&A, while his own advantage is British Columbia.

Top takeaway Khunkhun argues the roughly 50% fall in Contango's shares since January 2026 reflects a sector-wide sell-off, not a problem with the company, and presents the shares at about three times next year's expected free cash flow as the buying case.
He insists hedging was never a speculative position on the gold price but a covenant imposed by the debt used to build the mine, and says the company will never hedge again.
He sides with management over geology when picking which matters more for a long-term holder, on the reasoning that reserves are a depleting inventory and a shareholder needs a team that can accretively maintain or expand it through exploration or M&A.
He rules out a dividend for at least five years while the company targets a six to seven times increase in cash flow over the next five years with materially higher gold output and the introduction of silver production.
He argues the shares can re-rate before Lucky Shot reaches production, pointing to what he calls an incredibly tight 33 million share count and to April 2026, when the gold miners index was flat for the month while Contango rose 30%.

Top takeaway Powers frames the interview around the roughly 50% share decline since January 2026, asking what questions the market still wants answered about Contango Silver and Gold.
He puts the view to the guest that management execution should outweigh geology by about 60% in a junior mining company, and raises the question of what a company with production, near-term projects and exploration at once will reward most.